Winsted Board of Education's audit outcome: Less to pay back to federal government

The Connecticut Department of Education informed the Winchester Public Schools central office that rather than having to repay $636,000 in federal stimulus funds, the only grant money that may be in question would be a more manageable $1,825.99. Winchester Superintendent of Schools Thomas Danehy said that with the decision in hand, the school system can "move on, putting this issue behind us and focusing on teaching and learning."

"I think it's great news," Danehy said.

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The entire dispute stemmed from the 2009-10 municipal audit, which was repeatedly delayed due to paperwork problems. Winchester's school system had churned through three financial managers in a 12-month span, and the school system needed to sort out the books. In the process, the district's central office documented several transactions involving American Reinvestment and Recovery Act funds using journal entries.

These entries caused problems once town auditor Vanessa Rossitto closed her books, citing the $636,000 in improperly-documented funds. Considering that the funds in question came from the federal government, Winsted faced a potential investigation and the possibility of having to repay the funds.

Subsequently, the Winchester school district enacted an extensive corrective plan, including revising its pay stubs to indicate which grants are funding employees. These payments will also be made directly from grants, rather than being routed through the general fund. Additionally, the district hired certified public accountant Nadine Savage to supervise the central office's business operations.

While the federal government could have investigated the Winchester school system, the federal government deferred to the Connecticut Department of Education. On April 27, the state department concluded that it was satisfied with most of the measures taken by the school district. The only remaining issue was one transaction, which was for $1,825.99, that was not properly supported, and Winsted's schools will receive direction on repaying that transaction in the coming days.

"It's a great step in a new direction," said Danehy.

With the audit's impending resolution, Danehy said, Winsted's school system can move forward to more current matters. The Board of Selectmen is still withholding $636,000 in funds that would make the town whole against the minimum budget requirement -- the board voted to comply with the mandate, then made $732,149 available to the school system -- and a lawsuit against the town, Board of Selectmen and four Selectmen to vote for the 2011-12 budget is still pending.

Danehy said he hopes the audit's closure can give the district a chance to work on its educational needs. But the superintendent also tipped his cap towards the district's business office.

"I'm just appreciative of the work that's been done by the staff," said Danehy.